The Ministry of Finance approved the bill introducing a simplified procedure for the bankruptcy of individual persons. The maximum debt of a candidate for "simplified order" in the last version of the bill was reduced from 900,000 to 700,000 rubles. The lawyers that Pravo.ru has surveyed do believe that bankruptcy should be available for the individuals with a relatively small amount of debt, but even the new criteria for entering this procedure still leave a large number of consumers "outside" who fail to calculate their financial capabilities and get into debt bondage.
According to the current version of the bill, the procedure shall be available for those Russians, including individual entrepreneurs, whose indebtedness is not less than 50,000 rubles, but no more than 700,000 rubles, the simplified procedure for. (See "The Ministry of Finance approved the simplified bankruptcy of individuals with a debt of up to 700 000 rubles."). The previous version provided that the debt should not exceed 900 000 rubles. Another aspect has been changed in the document: the monthly income of a potential bankrupt in the last six months should not be more than 50,000 rubles.
Other conditions for the simplified bankruptcy of individuals remained the same: for the last six months, no more than 25% of the overall debt should arise, and during the year the citizen should not alienate the property for more than 2 million rubles (the only exception is the sale of the pledge at the the bank's initiative), as well as to make gratuitous transactions to alienate the property for more than 200,000 rubles. 10 years should from the date of the last sale of property under the "simplified procedure", and not less than five years should pass since the restructuring. At the same time, the applicant for bankruptcy should not have more than 10 creditors, and there should be no outstanding criminal record as regards economic crimes.
In June 2016, the Ministry of Economic Development and the Russian Union of Self-Regulating Organizations of Bankruptcy Receivers have independently developed the amendments to the simplified bankruptcy procedure for individuals. Both bills have similar points as well as a number of differences. So, the MED proposed to allow the future bankrupt to conduct many procedures independently, without the assistance of a bankruptcy receiver, for which it is necessary to pay extra-heavy amounts. This caused a flurry of indignation on the part of the receivers (see "Bankruptcy receivers did not support the MED project on the simplified procedure for the bankruptcy of individuals").
Bankruptcy should be affordable for individuals
"Now, to become bankrupt, you need to go bankrupt, but not all the way through," says Yulia Marants, partner and lawyer at Yukov & Partners, "It's not always possible to save money to cover the fees of a financial manager." Many, when they spend, waste all their money and they end up without a penny, and then they suddenly find out that it's not that easy to go bankrupt. "We need money, and not at all just 25,000 rubles." Of course, it is necessary to simplify the procedure for natural persons and reduce the barrier to entry, the lawyer believes. Bankruptcy, in her opinion, should be really affordable for individuals. "The costs of the procedure should not be prohibitive," adds Marants. "There can not be any property qualification for being recognized as insolvent, so it's worthwhile looking at the simplified bankruptcy bill with optimism." This step is in the right direction."
Attorney Alexey Mikhalchik also supports any changes in legislation aimed at reducing the cost and simplifying the procedure for the bankruptcy of natural persons. In his opinion, the law in the current version does not work and is actually declarative, because if you compare the number of debtors who passed this procedure to a mass of bad loans, it becomes obvious that this is a drop in the bucket. The population needs to be unloaded from debts, he says, even if it is necessary to do this contrary to the wishes of a powerful bankers' lobby.
Simplified bankruptcy has its shortcomings
The introduction of the simplified procedure of bankruptcy of natural persons has both advantages and disadvantages, says Sofia Karpenkova, lawyer at Khrenov & Partners. An obvious advantage, she believes, is to ensure greater accessibility of the bankruptcy procedure, in particular, the absence of the duty to engage a bankruptcy receiver. "As you know, now the institution of bankruptcy is not particularly popular due to money costs, including for court expenses and services of the bankruptcy," Karpenkova said. "Therefore, in this part, the procedure certainly required some simplification." On the other hand, many innovations imply giving too much freedom to the individual debtor, the expert adds. In such circumstances, the absence of a bankruptcy receiver, the debtor's identification of his creditors, the absence of their register and other nuances can be dangerous for creditors, Karpenkova believes.
"The procedure for getting rid of debts should be equally accessible to all categories of debtors: both in arrears of several hundred thousand rubles and those having debts of several million," says Yana Chernobel, attorney of the Moscow Bar Association "Barshevsky & Partners". However, today's laws leave " beyond the bankruptcy" a large number of consumer debtors who, having failed to calculate their financial capabilities, fell into bondage, and getting out of it is often more expensive than the debt that the debtor has. With the introduction of the simplified bankruptcy procedure seems reasonable and necessary. "
But we should not forget that the release of an individual from his obligations should not be too comfortable and burdenless even within the framework of a simplified procedure, adds Chernobel. Individuals should not have the impression that the bankruptcy is cheap, quick and easy. The bankrupt path must be thorny, otherwise numerous abuses can not be avoided, the lawyer sums up.
There are doubts that an individual will be able to carry out his own bankruptcy
"The main idea laid down in the draft law is an opportunity to speed up and simplify the procedure of personal bankruptcy for the debtors with a relatively small amount of debt," says Pyotr Nikitenko, attorney at A-PRO. "This is undoubtedly a sound and positive idea. But the opportunity for the person himself to administer the procedure is, in fact, is highly doubtful. The supporters of this approach often appeal to the fact that the lack of in the procedure of a financial manager will reduce the burden on the court. But in reality the need to interact with legally illiterate individuals and spend time on explaining the law and correcting mistakes will only increase the burden on judges and specialists. It might be worth thinking about an obligatory mediative procedure with the participation of creditors before going to court. "
Many debtors will not be able to use even the "simplified procedure"
"The goal of introducing the simplified procedure was to ensure the availability of a bankruptcy institution for the individuals who could not afford the financing of the standard procedure," said Sergey Vysotsky, attorney at S&K Vertical Law Firm. "However, with the amendments, the simplified procedure can only be applied if there is a debt of no more than 700 000 rubles (instead of the previously proposed 900 000 rubles) and the availability of debtor's property for a sum of not more than 200 000 rubles. Under such criteria, the simplified procedure does not cover the mortgagees and those who has taken an loan for the purchase of a vehicle, because with this amount of debt he probably holds a car with a higher cost, so most of the individuals for the sake of which a simplified procedure was developed will not be able to use it."
In foreign practice, there are examples not only of the use of a simplified procedure, but also of its application as a general rule, Vysotsky adds. This procedure of "direct bankruptcy" is stipulated in the US insolvency law, which allows to proceed to the complex procedure at the request of creditors. In our case, the simplified procedure will not only fail to become a general rule, but also risk becoming a very much rare exception, the lawyer believes.
Reduction of the "entrance barrier" to 700 000 rubles is an experiment of legal practice
The simplified procedure for bankruptcy, of course, is needed, says Artem Frolov, lawyer at Olevinsky, Buyukyan & Partners. It is introduced so that the most insecure debtors can return to the economic activity. This is also an excellent compromise between the new category of debtors (individuals) and the professional community of bankruptcy receivers, the expert adds: now the receiver can act as a representative of the debtor, without bearing traditional risks associated with professional activities.
"It's safe to say that these are not the final changes in the legislation on consumer bankruptcy," Frolov emphasizes. "The turnover is interested in the debtors' massive exit from shade and in an increase in the economically active population, and the previous version of the law on bankruptcy could not achieve this. Reduction of the entry barrier to 700 000 rubles is due to the fact that the legislator is experimenting with practice, if the law will work, then the threshold will be raised again."